1. The interpretation and application of a statute of limitations is a question of law
for which an appellate court's review is unlimited.

2. Under K.S.A. 2001 Supp. 60-513(b), the 2-year statute of limitations begins to run
when the fact of injury becomes reasonably ascertainable.

3. The critical date for the beginning of the running of the statute of limitations under
K.S.A. 2001 Supp. 60-513(b) is when there was ascertainable knowledge of the
fact of injury sufficient to justify an action for recovery of damages, regardless of
the extent. The statute does not require an injured party to have full knowledge of
the extent of the injury to trigger the statute.

4. Pass-through claims are claims by an allegedly damaged party against an allegedly
responsible party with whom it has no contractual relationship. These claims are
presented by or though an intervening party in privity with both. It is an attempt to
avoid an extra layer of litigation between the parties themselves.

5. Under the facts of this case it was an abuse of discretion for the trial court to
dismiss the State's claim against its codefendant for failure to designate an expert
under the court's timetables, as it would have been illogical for the State to do so
prior to the settlement and liquidation agreement being reached.

6. Under the facts of this case, the codefendant suffered no real prejudice from the
defendant State's failure to designate its own expert on the codefendant's fault and
the resulting damages under the trial court's timetables. The codefendant knew the
expert who had been named and was to be used by the plaintiffs in their pass-through action
through the State.

Ron Campbell and Lyndon W. Vix, of Fleeson, Gooing, Coulson
& Kitch, L.L.C., of Wichita, for the
defendants-appellees/cross-appellants, The Law Company, United States Fidelity & Guaranty
Company, and the
State of Kansas.

Stewart Entz and Michael Entz, of Entz & Entz, P.A., of
Topeka, for the plaintiffs-appellees/cross-appellants Central Mechanical Construction Co., Inc.,
and D.L. Smith Electrical Construction, Inc., and the
defendant-appellee/cross-appellant State of Kansas.

William A. Larson and Timothy A. Schultz, of Gehrt &
Roberts, Chartered, of Topeka, for amicus curiae,
The Associated General Contractors of Kansas. Inc.

PIERRON, J.: Roof-Techs International, Inc. (Roof-Techs) appeals from the
district court's decision to grant summary judgment in favor of The Law Company, Inc.
and its insurance company, United States Fidelity & Guaranty Co.(Law); the State of
Kansas (State); and Brent Bowman and Associates Architects, P.A. (BBA). The district
court found Roof-Techs' claims were barred by the statute of limitations. Central
Mechanical Construction Co., Inc. (Central); D.L. Smith Electrical Construction, Inc.
(Smith); the State; and Law collectively appeal from the court's decision to grant
summary judgment in favor of BBA. We affirm in part, reverse in part, and remand for
further proceedings consistent with this opinion.

This case arises out of the renovation and expansion of Farrell Library on the
campus of Kansas State University. The State was the owner, BBA was the architect,
Law was the general contractor, and Central, Smith, and Roof-Techs were subcontractors.

The complex facts and issues of this case must be set out in detail for there to be
an understanding of the eventual ruling. More than one reading may be necessary.

In November 1992, BBA entered into a contract with the State to provide
architectural design and construction administration services for the Farrell Library
Expansion and Renovation Project (the project). In May 1994, Law entered into a
contract with the State for construction of the project. Thereafter, Law subcontracted
mechanical, electrical, and roofing work to Central, Smith, and Roof-Techs, respectively.

In August 1997, Central filed suit against the State, BBA, and Law to recover
damages incurred as a result of delays and problems in the project. The petition set forth
a breach of contract claim against Law; a professional negligence claim against BBA; a
negligent representation claim against the State, Law, and BBA; and claims for quantum
meruit and unjust enrichment against both Law and the State. Central's petition was
subsequently amended to add Smith as a plaintiff.

In October 1997, Law answered the suit brought by Central and Smith, and filed a
cross-claim against the State. Law's claims against the State were breach of contract,
breach of implied warranty, and misrepresentation. The State answered Central and
Smith's petition as well as Law's cross-claim. The State asserted cross-claims against
both Law and BBA for breach of contract, breach of warranty, indemnity/contribution,
and negligence. BBA answered the claims asserted by the State, Central, and Smith, then
added a cross-claim against the State for unpaid professional services.

In May 1998, Roof-Techs filed a separate lawsuit which mirrored that of Central
and Smith and sought to recover damages sustained as a result of defects in the plans and
delays on the project. The petition set forth a breach of contract claim against Law, a
professional negligence claim against BBA, and a negligent misrepresentation claim
against Law, the State, and BBA, collectively. In October 1998, the Roof-Techs case was
consolidated with the Central and Smith case.

In April 2000, BBA filed a motion for summary judgment on the tort claims
asserted directly against it by Central and Smith, primarily arguing the claims were barred
by the statute of limitations. In June 2000, the State joined BBA's motion and sought
summary judgment on the tort claims asserted against the State by Central and Smith. In
September 2000, the court granted the motions of BBA and the State, and entered
judgment against Central and Smith on the tort claims asserted against BBA and the State.

Central and Smith did not appeal the judgment against them on their tort claims.

In November 2000, BBA filed a motion for summary judgment as to the tort
claims asserted against it by Roof-Techs. In December 2000, Law and the State filed a
similar motion seeking summary judgment with regard to the tort claims asserted against
them by Roof-Techs.

Also in November 2000, Central, Smith, Law, and the State entered into a
settlement and liquidation agreement whereby all claims among those parties were
settled. As part of the agreement, the State paid $750,000 to settle all claims unrelated to
BBA's conduct. The agreement assigned to Law, Central, and Smith all claims the State
might have against BBA. In addition, under the terms of the agreement, the breach of
contract claims of Central and Smith and Law asserting defects in the architectural plans
were purportedly "passed through" the State to be asserted against BBA.

In other words, the agreement intended to allow the contractors to step into the
shoes of the State to present their claims directly against BBA. The agreement authorized
the contractors to pursue those claims either in their own names or in the State's name.

In December 2000, an amended petition was filed which showed Central, Smith,
Law, and the State as plaintiffs and BBA as the defendant. No formal order allowing the
amendment was ever entered.

While the motions aimed at Roof-Techs' claims were pending, BBA moved for
summary judgment on the State's indemnity claims and also moved to dismiss the
amended petition. The motion for summary judgment alleged that BBA was entitled to
judgment as a matter of law on all of the State's cross-claims because the State had failed
to designate an architectural expert. The motion to dismiss rested on essentially the same
grounds, but added the allegation that the State's indemnity claim should be dismissed
because the State had extinguished any obligation to pay the contractors for damages
attributable to the conduct of BBA by entering into the agreement with Law, Central, and
Smith.

In January 2001, the court granted BBA's dispositive motions with regard to the
State's claims. At the same time, the court granted the summary judgment motions of
BBA, the State, and Law with regard to the tort claims asserted by Roof-Techs.

The court found that the statute of limitations barred Roof-Techs' claims for
negligent misrepresentation against BBA, the State, and Law and also barred its claim for
professional negligence against BBA. Concerning BBA's motion for summary judgment
against the State, the court found the agreement was not a valid liquidating agreement; it
did not assign all claims of the State to Law, Central, and Smith; and the State's failure to
designate an expert witness to support its claims against BBA rendered those claims
unenforceable and, thus, incapable of assignment. As to BBA's motion to dismiss the
amended petition, the court determined the agreement was effective to release the State
from liability for any claims for harm that might have been caused by BBA, which
rendered the State's indemnity claims inappropriate. Further, the court reiterated its
finding the State had failed to identify expert witnesses to sustain its claims against BBA
directly. Thus, the court found no remaining legal basis for the amended petition and
dismissed it accordingly.

Law, the State, Central, and Smith filed motions to amend the judgment. In
addition, BBA filed a motion to "unconsolidate" the two consolidated cases under the
theory that the Roof-Techs contract claim against Law could proceed, while the case
involving Central, Smith, Law, the State, and BBA would be final and ripe for appeal.
On March 12, 2001, the district court denied the motions to amend judgment filed by
Law, the State, Central, and Smith. The court also denied the motion to unconsolidate,
holding that "there are no longer any case(s) pending to which the motion to
'unconsolidate' can apply." In so doing, the court presumably disposed of Roof-Techs'
contract claim against Law.

On March 26, 2001, Roof-Techs sent a letter to the district court inquiring about
the status of its contract claim against Law. The letter stated, inter alia: "[I]t appears
the
decision overrules all claims, including the contract claim of [Roof-Techs]. If this
understanding is not correct, please advise." There is no record of any answer from the
court. Subsequently, on April 11, 2001, Roof-Techs filed a notice of appeal from the
district court's ruling. On April 10, 2001, Central, Smith, the State, and Law filed a joint
notice of appeal from the district court's ruling.

"'Summary judgment is appropriate when the pleading[s], depositions, answers to
interrogatories,
and admissions on file, together with the affidavits, show that there is no genuine issue as to any
material
fact and that the moving party is entitled to judgment as a matter of law. The trial court is
required to
resolve all facts and inferences which may reasonably be drawn from the evidence in favor of the
party
against whom the ruling is sought. When opposing a motion for summary judgment, an adverse
party
must come forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive issues in the
case.
On appeal, we apply the same rules and where we find reasonable minds could differ as to the
conclusions
drawn from the evidence, summary judgment must be denied.' [Citation omitted.]" Mitchell
v. City of
Wichita, 270 Kan. 56, 59, 12 P.3d 402 (2000) (quoting Bergstrom v. Noah,
266 Kan. 847, 871-72, 974
P.2d 531 [1999]).

The first issue that should be addressed is whether the district court actually
granted summary judgment in favor of Law regarding Roof-Techs' contract claim.

It is clear from the record that Law moved for summary judgment against Roof-Techs
only on its negligence claims. Law's memorandum in support contains a footnote
that states: "[Roof-Techs] has also filed a breach of contract claim against Law which is
not addressed in this motion." Subsequently, Roof-Techs filed its response, which did
not address the contract claim against Law. The district court granted summary judgment
in favor of Law and against Roof-Techs on the negligent misrepresentation claim but did
not direct summary judgment against Roof-Techs on the contract claim against Law.

There is no doubt that all parties were under the impression that Roof-Techs'
contract claim against Law was still pending. This is evidenced by the fact that Law
specifically excluded the contract claim from its motion for summary judgment as well as
the fact that BBA filed a motion to unconsolidate because it also assumed there was still a
breach of contract claim by Roof-Techs against Law which had yet to be resolved. It was
not until the district court's March 12, 2001, letter decision that it became apparent the
court was also dismissing Roof-Techs' contract claim against Law. The letter decision
stated: (1) The action was dismissed by order dated January 18, 2001; (2) the court
declines to revisit any issue; (3) there are no longer any cases pending to which the
motion to unconsolidate can apply; and (4) the letter decision serves as the court's final
decision and order, no further journal entry being required.

Although the contract claim was not specifically mentioned in the letter decision,
it is clear it was the district court's intention to dismiss all remaining claims. Following
the March 12, 2001, decision and after speaking with Law, Roof-Techs submitted a letter
to the court stating it appeared its contract claim was dismissed and to please advise if
that was not correct. The record is void of any response by the court. The only logical
assumption is that the court intentionally disposed of Roof-Techs' contract claim against
Law.

On appeal, Law essentially argues that although the district court failed to set forth
the basis for its dismissal of the contract claim, Roof-Techs' failure to challenge the
sufficiency of the court's ruling is fatal to its appeal. Law cites United Proteins, Inc. v.
Farmland Industries, Inc., 259 Kan. 725, 731, 915 P.2d 80 (1996), in support. In
Farmland, the cross-appellant argued the district court erred when it found Farmland
liable for the tort of intentional private nuisance without making a specific finding the
nuisance was intentional. The Farmland court stated:

"Although the trial court should state the controlling facts in its decision (Supreme Court
Rule 165 [1995
Kan. Ct. R. Annot. 171]), where the court fails to do so and the litigants fail to object, the trial
court is
presumed to have found all facts necessary to support the judgment, and omissions in findings will
not be
considered on appeal. [Citation omitted.]" 259 Kan. at 731.

However, the Farmland court then concluded the proper scope of review over
the
nuisance claim was to determine whether there was substantial competent evidence
presented that established intent. Following a brief discussion, the Farmland court
found
the record did not support the presumption that the district court found all necessary facts.
The court then held the requisite finding of intent was not supported by substantial
competent evidence and reversed the trial court. 259 Kan. at 732-34. In essence, the
Farmland court ruled the presumption was overcome by the complete lack of
evidence of
intent.

In the instant case, Roof-Techs' contract claim was dismissed on summary
judgment without any explanation and without Law having moved for summary judgment
on that claim. The record is void of any reason why the contract claim should have been
dismissed on summary judgment. It is uncontested that Roof-Techs had a contract with
Law, and it is uncontested that Roof-Techs brought the breach of contract claim within
the statute of limitations.

Although the better approach would have been for Roof-Techs to file a motion to
amend the judgment, the failure to do so is not fatal to its appeal. It is clear Roof-Techs
was unsure whether the journal entry actually disposed of its contract claim because the
journal entry was so lacking in substance. This is evidenced by the fact that counsel for
Roof-Techs spoke with opposing counsel and sent a letter to the district court in an
attempt to clarify the ruling. By that time, the time limit for posttrial motions had passed.

As in Farmland, the record in the instant case does not support the
presumption
that the district court found all necessary facts to support its decision, especially in light
of the fact the contract claim was dismissed on summary judgment. The district court
must be reversed with directions to reinstate Roof-Techs' breach of contract claim against
Law.

Roof-Techs' initial petition contained a professional negligence claim against BBA
and a negligent representation claim against Law, the State, and BBA, collectively. The
professional negligence claim was based on the allegation BBA breached its duty of care
by failing to provide adequate and accurate drawings and information upon which Roof-Techs
had relied in formulating its bid. Additionally, Roof-Techs alleged BBA had failed
to timely and adequately respond to requests for information and proposed change orders.
The negligent representation claim was based on the allegations that BBA falsely
represented that the drawings were adequate and sufficient to allow Roof-Techs to
formulate an accurate bid on the project and BBA falsely represented that asbestos would
be removed by others prior to the start of work.

Subsequently, BBA, the State, and Law all filed motions for summary judgment
against Roof-Techs on the these tort claims, primarily arguing the claims were barred by
the 2-year statute of limitations. The district court found Roof-Techs was aware of the
discovery of asbestos in July 1995. Roof-Techs became aware it was suffering from
delays as a result of the asbestos and change orders no later than the end of 1995. Thus,
Roof-Techs' injury was reasonably ascertainable at that time, and its tort claims were
barred by the statute of limitations. Further, the court discounted Roof-Techs' contention
that the statute of limitations should have been tolled because Roof-Techs had been led to
believe it would be able to recover the cost it was incurring from the delays by repricing
and performing asbestos removal. Instead, the court found that Roof-Techs had been
alerted no later than September 1995 that it would not be conducting additional work.

On appeal, Roof-Techs argues it did not fully comprehend the extent of the delay
and damages it had suffered until the summer of 1996. Additionally, Roof-Techs claims
that Law and the State enticed it into completing the project and that the additional costs
incurred would be reimbursed if it remained on the job. Thus, Roof-Techs contends the
district court should be reversed because there is, at a minimum, a question of fact as to
when the injury became reasonably ascertainable.

The interpretation and application of a statute of limitations is a question of law for
which the appellate court's review is unlimited. Dougan v. Rossville Drainage Dist.,
270
Kan. 468, 472, 15 P.3d 338 (2000). When a statute of limitations begins to run is a
question of law over which this court has unlimited review. Brown v. State, 261
Kan. 6, 8,
927 P.2d 938 (1996).

All parties agree the claims at issue are governed by the 2-year statute of limitations
contained in K.S.A. 2001 Supp. 60-513(a)(4). The rule as to when a cause of action in
tort is deemed to accrue is set forth in K.S.A. 2001 Supp. 60-513(b) as follows:

"Except as provided in subsections (c) and (d), the causes of action listed in
subsection (a) shall
not be deemed to have accrued until the act giving rise to the cause of action first causes
substantial injury,
or, if the fact of injury is not reasonably ascertainable until some time after the initial act, then the
period of
limitation shall not commence until the fact of injury becomes reasonably ascertainable to the
injured party,
but in no event shall an action be commenced more than 10 years beyond the time of the act
giving rise to
the cause of action."

Here, Roof-Techs claims substantial injury did not occur until some time following
the discovery of asbestos of the project site. Thus, under K.S.A. 2001 Supp. 60-513(b),
the 2-year statute of limitations began to run at the point in time when the fact of injury
became reasonably ascertainable to Roof-Techs. In the case of Roe v. Diefendorf,
236
Kan. 218, 689 P.2d 855 (1984), the court determined the application of K.S.A. 60-513(b):

"We hold the use of the term 'substantial injury' in the statute does not require an injured
party to have
knowledge of the full extent of the injury to trigger the statute of limitations. Rather, it means the
victim
must have sufficient ascertainable injury to justify an action for recovery of the damages,
regardless of
extent. An unsubstantial injury as contrasted to a substantial injury is only a difference in degree,
i.e., the
amount of damages. That is not a legal distinction. Both are injuries from which the victim is
entitled to
recover damages if the injury is the fault of another. A separate classification for the two, for
purposes of
limiting actions thereon, is in violation of the Equal Protection clause of the Fourteenth
Amendment to the
Constitution of the United States, because such classification has no legitimate legislative purpose.
[Citation omitted.] It is the duty of the judiciary to construe statutes in such a way, if possible, as
to sustain
the act's constitutionality. [Citation omitted.] Therefore, we construe the phrase 'substantial
injury' in
K.S.A. 60-513(b) to mean 'actionable injury.'" 236 Kan. at 222-23.

Roof-Techs' president, Michael Page, testified in a deposition that he was aware
asbestos was present in the roof of the project in the summer of 1995. He also testified he
was aware that by the end of 1995 that the discovery of asbestos was going to cause some
delay in Roof-Techs' performance. This was further evidenced by a September 1995 letter
that Page wrote to Kelly Stillings of Law complaining that the discovery of asbestos had
already caused delays and additional costs to Roof-Techs.

Notwithstanding the aforementioned facts, Roof-Techs contends it did not fully
comprehend the impact of the delays and damages until the summer of 1996, and the
statute of limitations did not commence to run until that time. Page, in his deposition,
stated: "[By the end of 1995] I knew that we were delayed. I didn't realize, probably until
much later, the full impact of the delays." The fact Roof-Techs may not have fully
comprehended the impact of the delays is insufficient to toll the statute of limitations.
"[T]he critical information is knowledge of the fact of injury, not the extent of injury.
[Citation omitted.]" Bryson v. Wichita State University, 19 Kan. App. 2d 1104,
1108, 880
P.2d 800, rev. denied 256 Kan. 994 (1994).

Further evidence shows that Roof-Techs was sufficiently aware, at the latest, by the
spring of 1996, that it had sustained actionable damages as a result of the asbestos-related
delays and change orders. On October 26, 1995, Page wrote a letter to Stillings in which
he notified Law that Roof-Techs was being greatly delayed on the project due to change
orders that were taking an extreme amount of time to be approved. The letter went on to
state the change orders were no fault of Roof-Techs but had greatly affected its costs. The
letter concluded that Law should notify the State and advise Roof-Techs as to directions
for compensation.

On March 4, 1996, Page again wrote Stillings and indicated his belief Roof-Techs
had sustained damages which entitled it to compensation. The letter stated: "Roof-Techs
will be filing [a] claim, on the referenced project, for cost increases due to owner delays.
Cost breakdowns will follow. If you have any questions contact me."

Page's deposition testimony coupled with his letters to Billings clearly establish that
Roof-Techs was aware of all the necessary facts to commence the running of the statute of
limitations by March 1996. Because Roof-Techs did not file its lawsuit until May 15,
1998, its tort claims are time barred.

Roof-Techs further argues, at least as to its tort claim against Law and the State,
that the statute of limitations was tolled because Roof-Techs was enticed into believing it
would be compensated for its damages caused by the delays. In support, Roof-Techs cites
to the fact it was invited to submit a proposed change order for an amended contract to
include payment to Roof-Techs for asbestos removal. However, Roof-Techs knew no
later than the end of 1995 the contract for the asbestos removal was awarded to a different
company.

Further, Roof-Techs claims it was led to believe it could proceed with a delay
claim, which it ultimately did, in order for the project to be completed. Although this is
true, Roof-Techs fails to offer any legal authority on why that fact would toll the running
of the statute of limitations. The burden of proving facts sufficient to toll the statute of
limitations is upon Roof-Techs. See Slayden v. Sixta, 250 Kan. 23, 26, 825 P.2d 119
(1992). Roof-Techs has not sustained this burden by demonstrating merely that Law told
it to file a delay claim with the State for damages.

The district court did not err in finding Roof-Techs' negligence claims were time
barred by the 2-year statute of limitations.

While this case was pending on appeal, Roof-Techs filed a motion with this court
requesting attorney fees and expenses incurred while responding to BBA's motion for
clarification of an order from this court that denied the State's and Law's motion for
dismissal of the appeal. Roof-Techs claims BBA's motion lacked a factual basis, was
frivolous, and had no support in the law.

Without belaboring the point, Roof-Techs' claim is wholly without merit. First,
Roof-Techs was not even required to respond to the motion for clarification. Second, the
motion for clarification apparently had some merit because it was granted in an order from
this court. Finally, as required by Supreme Court Rule 7.07(b) (2001 Kan. Ct. R. Annot.
52), Roof-Techs did not attach an affidavit to the motion specifying "(1) the nature and
extent of the services rendered; (2) the time expended on the appeal; and (3) the factors
considered in determining the reasonableness of the fee. (See KRPC 1.5 Fees.)"

We turn to the question of the effect of the State's failure to name an expert in the
normal fashion.

For a large majority of the time this case was pending, up until the execution of the
liquidation agreement, the State was not necessarily adverse to BBA. The State's claims
against BBA rested in breach of contract, breach of implied warranty, indemnity, and
negligence. However, at the outset, the State took the position the contractors were owed
nothing. As between BBA and the State, the State did not come forward in discovery with
any evidence in support of a claim against BBA. The State did not retain or designate an
expert witness to testify to any violation of the duties and standard of care between BBA
and itself, or to causation of any damages to itself.

The deadline for the State and BBA to name experts and provide their reports, as
required by K.S.A. 2001 Supp. 60-226(b)(6), was September 29, 2000. In October 2000,
the district court entered an order directing the parties to exchange pretrial questionnaires
by October 26, 2000. The State declined to submit a pretrial questionnaire setting forth
any theory of a claim, damages, witnesses, or exhibits in support of a claim against BBA.

BBA filed its motion for summary judgment against the State on October 31, 2000.
BBA moved to dismiss the State's claims on the basis the State had no expert testimony to
establish the standard of care, breach of the standard of care, or proximate cause. That
expert testimony was needed to establish liability on the part of BBA was never, and is
still not, disputed. The State never made a motion for permission to designate an expert
out of time and/or to file a pretrial questionnaire out of time.

It is worth noting, as Law's brief points out, that until the liquidation and settlement
agreement came into existence, it would have been quite illogical for the State to designate
an expert. The source of Law's claim against the State was the Spearin doctrine
(United
States v. Spearin, 248 U.S. 132, 63 L. Ed. 166, 39 S. Ct. 59 [1918]), which held an owner
of a construction project impliedly warrants the contract documents, including but not
limited to the plans, are accurate and suitable such that the contractor can perform its work
in accordance therewith. The State's claim against BBA asserted that if the plans were
defective, the ultimate responsibility should lie with BBA. Thus, designation of an expert
by the State to prove BBA's liability would have also proved its own liability to the
contractors.

In November 2000, the State, Law, Central, and Smith entered into a contract
among themselves entitled "Settlement and Liquidation Agreement." The agreement
purported to assign the State's claims against BBA to the remaining parties and to
authorize the remaining parties to pursue the assigned claims in the name of the State or in
their own name. Further, the agreement provided the State would pay $750,000 to settle
its claims with Law, Central, and Smith. The parties to the agreement then discharged
each other from liability for all claims among themselves, except to the extent of the
amount recovered from BBA.

Law advised the district court of the agreement at the pretrial conference on
December 7, 2000, and from that point forward, Law filed responses to BBA on behalf of
the State. That same day, Law filed a response to BBA's motion for summary judgment
against the State, asserting the motion was moot because the contractors now stood in the
shoes of the State and were prosecuting their claims through the State. Accordingly, the
contractor's experts were now the State's experts. It is worth noting that at this point in the
litigation, neither Law, Central, nor Smith had any claims pending directly against BBA.

On December 11, 2000, Law attempted to file an "Amended Pretrial Questionnaire"
on behalf of the State. Of course, the State had never filed an original pretrial
questionnaire. In this document, Law attempted to include the State in Law's theories of
recovery against BBA and attempted to designate the contractor's witnesses, including
their experts, to testify on behalf of the State.

The district court deferred consideration of a pretrial order and focused on the
merits of BBA's summary judgment motion, issuing its ruling on January 18, 2001. The
court found the agreement among Law, the State, Central, and Smith was not really a
liquidation agreement as the parties had captioned it, but rather an attempted assignment
of the State's claim, which was subject to summary judgment because the State lacked
admissible evidence sufficient to raise a genuine issue of material fact. The court ruled:

"In the case at bar, the State lost its ability to recover against BBA when it failed
to timely
designate experts (which all parties concede were necessary to prove the State, Law and/or the
Subcontractors' claims). Thus, the State cannot agree to bring an action against BBA for
the claims of Law
and the Subcontractors, the proceeds of which it would 'pass through' to Law and the
Subcontractors. The
State has no remaining enforceable claims against BBA at all."

Preliminarily, all claims against BBA not brought by the State have been dismissed.
Law, Central, and Smith have not appealed the dismissal of their negligence claims against
BBA. It follows that any claim against BBA must go through the State. Thus, the first
issue that needs to be discussed is the question of whether the district court erred when it
found the State lost its ability to recover against BBA by failing to timely designate any
experts. If the district court was correct when it found the State had no remaining
enforceable claims against BBA, then it would logically follow the settlement and
liquidation agreement would be of no consequence because either the State could not
assign what it no longer had, or Law, Central, and Smith could not prosecute any claims
through any State claims that no longer existed.

The district court granted summary judgment in favor of BBA because the State
failed to comply with discovery deadlines and failed to designate an expert which was
needed to prove liability against BBA. This decision will not be disturbed on appeal
absent an abuse of discretion. See Olathe Mfg., Inc. v. Browning Mfg., 259 Kan.
735,
768, 915 P.2d 86 (1996) (reviewing the trial court's decision to exclude expert testimony
based on late disclosure).

In its brief, Law's (and the State's) entire claim is based on the premise that one
party may use another party's expert to establish the standard of care. Law cites case law
purportedly standing for the proposition that as a general rule, a party is not precluded
from calling as its own witness an expert who has been retained and identified by the
opposing party. Thus, according to Law, the State should have been permitted to call the
experts previously identified by the contractors, presumably because the pretrial
questionnaire filed by the State indicated it intended to call those experts.

The legal authority cited by Law is not controverted. Although it does stand for the
proposition that one party may use another party's expert witness, the flaw in Law's
argument is the fact that in the cited case law, those parties had timely designated the
adverse parties' witnesses on the pretrial order. Here, the State did not. A pretrial
questionnaire identifying expert witnesses was not filed on behalf of the State until after
BBA moved for summary judgment due to the lack of designated experts. Further, there
was never a motion filed on behalf of the State asking the court to allow it to designate an
expert after the close of discovery.

Law argues that under the district court's ruling, a liquidation and settlement
agreement could never be entered into after the deadline for designating experts has passed
because the party through whom the claims would have been passed would not have
designated a liability expert. Law then claims that if the party through whom the claims
are to be passed cannot rely upon experts previously designated by the injured parties, the
injured parties will obviously not be interested in a liquidation agreement because such
agreements are predicated on the availability of the pass-through claim process.

Although this may be true, it does not fully excuse the State's lack of diligence in
prosecuting its claims against BBA. The State could have, and probably should have,
either sought an agreement with the contractors before the close of discovery, then
designated the contractors' experts as their own in a timely manner, or filed a motion with
the court for an extension of time to complete discovery and designate experts. In the
instant case, the State did neither.

It must still be determined if the trial court abused its discretion when it granted
summary judgment against the State for failing to timely designate an expert witness.

"In determining whether to exclude witnesses not disclosed in compliance with the
scheduling
order, the Court must consider four factors: 1) the reason for failing to name the witness, 2) the
importance
of the testimony, 3) potential prejudice in allowing the testimony, and 4) the availability of a
continuance to
cure such prejudice. [Citations omitted.]" Potomac Elec. Power v. Electric Motor Supply,
190 F.R.D. 372,
377 (D. Md. 1999).

The reason the State failed to designate an expert is self-evident. As stated earlier,
if the State had retained an expert to prove liability on the part of BBA, it would have
necessarily proved its own liability with respect to Law's claim against it. However, once
the agreement was entered into with Law, Central, and Smith, the State was free to retain
an expert. The State tries to paint a picture that it was in a "Catch-22" situation.
However, if the State had settled prior to the closure of discovery, it could have avoided
these problems. The importance of the testimony is equally as obvious. Without an
expert, the State cannot prove liability against BBA.

BBA does not really allege prejudice. The contractors' architectural expert opined
that BBA deviated from the standard of care and failed to satisfy its contractual
obligations, causing damages of over $4.3 million. The expert reports were issued in May
1999. From that day forward, BBA was aware of the evidentiary basis for the allegations
against it. BBA also deposed the contractors' experts. BBA knew of the experts,
reviewed the experts' reports, deposed the experts, retained a counter-expert, and had
ample time to prepare a defense. The fact the experts were not specifically designated by
the State caused BBA little, if any, prejudice or surprise. BBA was well aware of its
potential liability.

As we will detail below, the uncharted waters created by the kind of settlement and
liquidation agreement involved here present new procedural questions. We find that for
the reason set out above, the State should be forgiven for not naming an expert in a timely
manner, as it would have been illogical for it to do so prior to the settlement and
liquidation agreement being reached. While the State should have taken steps to name an
expert thereafter, as suggested earlier, no actual prejudice can be seen.

We, therefore, find it was inappropriate for the district court to take the draconian
step it did of extinguishing the State's claims for its technical procedural failure under
these facts. That portion of the district court's decision is reversed, and the matter will be
allowed to proceed.

Due to the novelty of the question, we will expand on our analysis.

"The legal effect of a written instrument is a question of law for the court to decide. On
appeal, a written
instrument or contract may be construed and its legal effect determined by the appellate court
regardless of the
construction made by the trial court. [Citation omitted.]" Dougan v. Rossville Drainage
Dist., 270 Kan. 468, 486,
15 P.2d 338 (2000).

As previously mentioned, the State, Law, Central, and Smith entered into a
settlement and liquidation agreement. As part of the agreement, the State paid $750,000 to
settle all claims with Law, Central, and Smith that were unrelated to BBA's conduct. The
agreement assigned to Law, Central, and Smith all of the claims the State may have had
against BBA. In addition, under the terms of the agreement, the breach of contract claims
of Central, Smith, and Law asserting defects in the architectural plans were purportedly
passed through the State to be asserted against BBA. In other words, the agreement
intended to allow the contractors to step into the shoes of the State to present their claims
directly against BBA. The agreement authorized the contractors to pursue those claims
either in their own names or in the State's name.

The legality of this kind of agreement has been, heretofore, undetermined in
Kansas. We note an article from the October 1998 edition of Construction Lawyer:
Calvert and Ingwalson, Pass Through Claims and Liquidation Agreements, 18 Const.
Law
29 (October 1998). The authors provide an excellent summary of the purpose and
function of pass-through claims and liquidation agreements:

"'Pass through claims' are claims by an allegedly damaged party against an
allegedly responsible
party with whom it has no contractual relationship. These claims are presented by or through an
intervening party in privity with both. The most common example of a pass through claim is a
claim by a
subcontractor arising out of the actions of the owner that is passed through to the owner by the
prime
contractor. A 'liquidation agreement' is a form of a settlement agreement in which a dispute
between two
parties with contractual privity is liquidated (settled) on terms delineating the rights,
responsibilities, and
procedures for presenting a pass through claim to a third party and allocating the costs expended
and
benefits received when doing so. It is an attempt by the parties to avoid an extra layer of litigation
(i.e.,
litigation between themselves) with its attendant costs and risks by focusing on the party
responsible." 18
Const. Law 29.

The agreement at issue in the present case is slightly atypical. Usually, a
subcontractor passes its claim against the owner through the general contractor. In the
present case, however, the subcontractors and general contractor are passing their claims
through the owner against the architect. As an added twist, the agreement in the instant
case purports to assign the State's claims against BBA to Law, Central, and Smith.

BBA extensively briefs the issue of assignment of claims. BBA's main contention
is that its contract with the State was one for personal services and Kansas law prohibits
the assignment of contracts for personal services without the express consent of both
parties. BBA relies on Alldritt v. Kansas Centennial Global Exposition, 189 Kan.
649,
371 P.2d 181 (1962), and Smith & English, Partners, v. Board of Education,
115 Kan.
155, 222 Pac. 101 (1924). These cases support BBA's contention that Kansas law
prohibits the assignment of personal services contracts.

The aforementioned cases, however, do not hold that a cause of action for breach of
such contracts cannot be assigned. In fact, the Alldritt court expressly held that
where the
performance of any further personal services under the employment contract at issue were
impossible, no consent of the other party was necessary to make the assignment valid.
The Alldritt court further held that where the assignee's rights in the contract in
question
were for money damages only, the contract was legally assignable. 189 Kan. at 657-58.

In Bank IV Wichita v. Arn, Mullins, Unruh, Kuhn & Wilson, 250 Kan.
490, 827
P.2d 758 (1992), a case cited by BBA, the court discussed the fact that actions for legal
malpractice, whether they sound in tort or contract, are not assignable. The court found
public policy considerations such as the unique quality of legal services, the personal
nature of the attorney's duty to the client, and the confidentiality of the attorney-client
relationship precluded the assignment of legal malpractice claims. 250 Kan. at 498-99.
The policy considerations expressed in Bank IV are not applicable to the instant case.

We find nothing in Kansas law that specifically prohibits the assignment of the
State's claims for breach of contract against BBA to Law, Central, and Smith. BBA
confuses the issue of whether a contract for personal services can be assigned with
whether a breach of contract claim, where the underlying contract was for nonlegal
personal services, can be assigned. The former cannot be assigned, while the latter can.
Of course, if the State had lost its claim due to its failure to designate, the State
would
have had no claim to assign.

We also note New York precedent dealing with this issue.

"General contractors on a construction project which have sustained no injury may
not bring suit
on behalf of a subcontractor for additional costs caused by the owner's delays [citation omitted].
Subcontractors, lacking privity of contract, are precluded from bringing suit against the owners
directly
[citation omitted]. A liquidating agreement is designed to overcome these legal impediments and
allow
contractors to bring an action against the owner on behalf of their subcontractors[.]

"Liquidating agreements have three basic elements: (1) the imposition of liability
upon the
general contractor for the subcontractor's increased costs, thereby providing the general
contractor with a
basis for legal action against the owner; (2) a liquidation of liability in the amount of the general
contractor's recovery against the owner; and, (3) a provision that provides for the "pass-through"
of that
recovery to the subcontractor [citation omitted]." Bovis Lend Lease LMB Inc. v. GCT
Venture, 285 App.
Div. 2d 69-70,728 N.Y.S.2d 25 (2001).

Following Bovis, which we find persuasive, it appears the agreement in the
instant
case accomplished what was intended. In Paragraph 2.1 of the agreement, the State
acknowledged its liability to Law, Central, and Smith for claims they asserted against the
State based on the acts or omissions of BBA, but only to the extent that Law, Central, and
Smith recover from BBA. Further, the State's liability to Law, Central, and Smith, and
Law's liability to Central and Smith were liquidated to the amounts recovered from BBA
and its insurers. Finally, the agreement contained a pass-through provision whereby the
State agreed that Law, Central, and Smith were entitled to any amount recovered on the
claims against BBA.

This is not the end of the analysis. The concept of these agreements begins with
the fact the subcontractor can sue the general contractor who can then sue the owner. The
agreements are intended to avoid an extra layer of litigation. Here, the subcontractors had
a claim against the general contractor, who in turn had a claim against the owner, who in
turn had a claim against the architectural firm. The subcontractors, general contractor, and
owner got together and settled their claims, except for claims related to BBA's liability,
among themselves. At that point, the contractors could have still brought claims against
the State based on BBA's liability, and the State could have sought indemnity from BBA.
The agreement intended to pass through the contractors' claims against the State and
liquidate the amount the State would owe the contractors to what they recovered from
BBA. This is needed because the State is the only party in privity with BBA.

Typically, it would be the State who would bring the contractors' claims on behalf
of the contractors. It appears the State attempted to avoid this problem by appointing
Law's attorneys as special assistant attorneys general for the purpose of this matter, after
this case was concluded in the district court and the appeal was in progress. The
assignment is also unusual. If the assignment is valid, the contractors, as assignees, could
pursue the State's claims, which would have become their own through the assignment,
and which, in reality, were initially their own claims anyway.

In Severin, the prime contractor brought suit against the government, which
was the
project owner, alleging damages caused by delays in the project on its own behalf and on
behalf of its subcontractor. When speaking as to the prime contractor's ability to recover
on behalf of the subcontractor, the Severin court stated:

"If [the prime contractor] had proved that they, in the performance of their contract with
the Government
became liable to their subcontractor for the damages which the latter suffered, that liability,
though not yet
satisfied by payment, might well constitute actual damages to [the prime contractor], and sustain
their
suit." 99 Ct. Cl. at 443.

The Severin court then found the prime contractor could not recover on
behalf of
the subcontractor because the two parties had previously entered into a contract with each
other wherein they could not be held liable to each other for any delay caused by the
owner. Thus, the prime contractor could not show any liability to the subcontractor for
breaches of contract by the owner. 99 Ct. Cl. at 443.

In Simmons, the prime contractor sued on behalf of its subcontractors for
damages
caused by the government's alleged breach of contract. Subsequent to completion, the
prime contractor and its subcontractors signed a "Subcontractor's Waiver of Lien and
Release" which provided the subcontractors' claims would be included in any claim
prosecuted by the prime contractor against the government. The agreement also stated that
either the disallowance of the subcontractors' claims by the court or the payment to the
subcontractors of the amount, if any, that might be recovered would completely extinguish
all further obligation of the prime contractor to the subcontractor and would operate as a
full and complete release of any and all liability. 304 F.2d at 887-88.

The Simmons court then reiterated that under Severin and its
progeny, a prime
contractor may sue the government (owner) on behalf of its subcontractors only "when the
prime contractor has reimbursed its subcontractor for the latter's damages or remains liable
for such reimbursement in the future." 304 F.2d at 888. The court found that even though
the subject provisions were "somewhat inartistic," they did not expressly negate the prime
contractor's liability to its subcontractors. Rather, the agreement recognized a liability and
set forth the manner in which the prime's liability was to be extinguished by requiring the
prime to prosecute the claims. 304 F.2d at 890.

"A settled-but-not-paid requirement, finally, also accords with the long-established
rule that a
contractor need not pay its sub before making a claim on its behalf. See George Leary
Constr. Co. v.
United States, 63 Ct.Cl. 206, 223, 1927 WL 2960 (1927) ('It is easy to forecast the
financial ruin of a
Government contractor if the rule is to be established that he may not receive amounts due from
the
Government under his contract until he establishes . . . that he has paid his subcontractor all he
owes
him.'); see alsoSeverin v. United States, 99 Ct.Cl. 435, 443, 1943 WL
4198 (1943) (holding that, if
contractor is liable to sub, 'that liability, though not yet satisfied by payment, might well constitute
actual
damages to [the contractor], and sustain their suit' under rule that contractor may only sue to
recover its
own damages)." 175 F.3d at 1250.

The Morrison court went on to opine that the Severin doctrine is
a federal
common-law doctrine that prevents a prime contractor from making claims against the
government (owner) on its subcontractor's behalf if the subcontractor has released the
prime contractor from liability. 175 F.3d at 1251. In discussing the applicability of the
Severin doctrine, the Morrison court stated:

"Courts have strictly limited the Severin doctrine, out of reluctance to
leave subs with valid claims
out in the cold. Courts have applied Severin only if the government proves that a sub
has executed an
ironclad, unconditional release of a prime. [Citations omitted.] Post-Severin
opinions often interpret
releases and contracts very generously in order to let primes press their subs' claims. [Citation
omitted.]
Those opinions also allow primes to rely on settlements with subs in which the prime's liability is
conditional. In such agreements, the sub releases the prime from any liability, and the prime
promises only
that it will press the sub's claim against the government and pay the sub whatever it recovers.
[Citations
omitted.]" 175 F.3d at 1251.

In sum, the concept of the instant agreement, at least in theory, seems to be
legitimate and seems to follow the general guidelines for pass-through claims and
liquidation agreements. There is nothing in the record that indicates any of the parties to
the agreement signed any sort of waiver that would implicate a Severin problem,
i.e., an
agreement which released the State from liability to the contractors. The wording in the
agreement appears to be sufficient to retain liability on behalf of the State for the amount
of recovery against BBA.

Of course, there are also some problems and difficulties with the agreement.
Initially, the defendant is not the government, as in most cases discussing these types of
agreements. Regardless, the reasoning seems to be equally applicable to private entities.
Next, this case has an extra layer of plaintiffs. There is no party in privity with all the
other parties. Typically, the prime contractor is in privity with both the subcontractor and
the owner (defendant). Here, the prime contractor (Law) is not in privity with the
defendant (BBA), and the State, although in privity with the BBA and Law, is not in
privity with the subcontractors.

Further problems are what to do about the purported assignment of the State's
claims and the issue of who is actually prosecuting which claims--the State or Law,
Central, and Smith. Typically, the contractors' claims would pass through the State. Here,
it at least appears the State's claims are being passed to the contractors. Per the liability
issue, it does not appear the State is being forced to prosecute the claims, such as the case
in Simmons.

We, therefore, affirm the district court's summary judgment as to the tort claims
being dismissed due to the statute of limitations.

We reverse the summary judgment as to Roof-Techs' contract claim against Law.
We can find no justification for the district court's action.

We reverse the district court's dismissal of the State's claims, and we allow Law to
proceed by means of a pass-through process under the facts of this case.

Affirmed in part, reversed in part, and remanded for further proceedings consistent
with this opinion.